With a debt reportedly in the hundreds of millions, the Dodgers are trying to cut costs in order to stay in compliance with MLB’s debt service rule, as Bill Shaikin of the Los Angeles Times reported earlier today. Obviously a debt of that size means that cutting player payroll is only one step the Dodgers will need to take to become more financially stable, yet given how the Dodgers ended last season paying over $291MM to its 40-man roster and have just under $172MM committed to 15 players (only 11 of whom are still in the organization) in 2017, payroll seems like a natural starting point.
The catch, of course, is that the Dodgers wholly plan on contending in 2017, so any type of a fire sale is out of the question. (So no, there’s no chance of your favorite team trading for Clayton Kershaw.) In fact, the phrase “too big to fail” comes to mind — the Dodgers have invested so much in their on-field product that they essentially can’t afford to fall out of contention, as drops in attendance or TV ratings would make their financial situation even more severe.
While Dodgers fans may be automatically fearing a return to the Frank McCourt era, there are plenty of reasons not to worry. Andrew Friedman’s front office has plenty of ways to save money while still reloading the roster for another run at the postseason, some of which they’re already exploring. For example…
1. Backloaded contracts for beyond 2018. Kershaw, Kenta Maeda and Yaisel Sierra are the only Dodgers under contract past the 2018 season, and Kershaw can exercise an opt-out clause following the 2018 World Series. Corey Seager, Joc Pederson and several other important players will be arbitration-eligible by that point and making well beyond their current minimum salaries, yet L.A. will have plenty of payroll breathing space in just two years’ time. Even by next winter, they’ll have over $46MM worth of breathing space when Carl Crawford and Alex Guerrero come off the books and Andre Ethier’s club option is presumably declined.
If the Dodgers wanted to land a big free agent this winter or re-sign at least one of Kenley Jansen or Justin Turner, therefore, the team could manage it in the form of a backloaded contract. Deferred money could also be an option; the Dodgers already used this tactic last winter with Scott Kazmir’s contract, as the lefty will be receiving deferred payments through 2021 even though his deal only runs through the 2018 season.
2. Replace Jansen and/or Turner internally, or with cheaper external options. The Dodgers’ bullpen finished at or near the top of the league in many important categories in 2016, and while Jansen and fellow free agents Joe Blanton and J.P. Howell were big reasons behind the pen’s success, there’s still lots of talent on hand. Pedro Baez, Adam Liberatore, Luis Avilan, Josh Fields, Grant Dayton, Josh Ravin and the newly-acquired Vidal Nuno all form a solid relief core, and that’s not counting further support in the form of starters who might be available for reliever roles. The Dodgers could supplement this group with a free agent with closing experience (i.e. Greg Holland, Koji Uehara, Brad Ziegler) with a much lower price tag than Jansen.
The third base picture is less clear if Turner leaves. Supersub Enrique Hernandez could take over in at least a platoon role, as Hernandez has hit very well against lefties in his career and the Dodgers could use another solid right-handed bat to balance their lineup. Looking at free agents, Luis Valbuena would command a solid but not unreasonable multi-year commitment, while Trevor Plouffe or Stephen Drew would be more inexpensive options.
Probably the best common ground for the Dodgers would be to use one of these scenarios to address one departure and then re-sign the other of Jansen or Turner. Letting both players leave would be a blow, though L.A. could collect the first-round draft picks attached to Jansen and Turner via the qualifying offer. With the farm system bolstered, that could free the Dodgers to…
3. Trade prospects for stars on inexpensive contracts. Thanks to their big spending and deep minor league system, the Dodgers are rumored to be involved pretty much every time a rebuilding team floats a notable player in trade talks. Both at the deadline and during the early stages of this offseason, the Dodgers have reportedly shown interest in players ranging from top-of-the-rotation aces (i.e. Chris Sale, Chris Archer) to second basemen like Brian Dozier or Logan Forsythe. These four not only bring value on their field, they also offer multiple seasons of cost-effectiveness thanks to team-friendly contracts.
It would take a lot to pry any of these players away from their current teams, though the Dodgers have the pieces to make a deal happen if they choose this direction. While Friedman has moved his share of notable prospects, he has also wisely held onto such blue-chippers as Seager or Julio Urias. Would he be similarly loath to part with the likes of Jose De Leon, Cody Bellinger or Alex Verdugo, especially since there’s no better way to keep payroll costs down than to replenish the roster with cheap young talent?
4. Swap one big contract for another that is a better fit. One of the main payroll issues facing the Dodgers is the substantial amount of money committed to players whose role on the 2017 team seems rather tenuous. With Kershaw, Maeda, Kazmir and Urias locking up the top four rotation spots, that leaves Brandon McCarthy and Hyun-Jin Ryu (owed a combined $38.6MM through 2018) battling for the fifth starter’s role, and that’s assuming either can stay healthy. Andre Ethier missed almost all of 2016 due to a broken leg, and while Yasiel Puig seemed to regain his standing within the organization after hitting well in September, it remains to be seen if the Dodgers necessarily still see him as a long-term building block.
Given how injuries ravaged the Dodgers’ rotation last year, it seems odd to suggest that they should consider dealing a starter, yet I’d think they would be quite open to moving McCarthy or Ryu if a decent offer arose. Teams would normally stay away from starters with such checkered injury histories, though there might be a slight opportunity for L.A. this winter given the very thin free agent pitching market. The Dodgers could explore trading McCarthy, Ryu or possibly even Kazmir for another player making a significant salary over the next one or two years, yet who is a better fit for their needs at second base, third base (if Turner leaves) or in the outfield.
Ethier and Puig are the most experienced names amidst the many corner outfielders on the Dodgers roster, a list that includes Andrew Toles, Trayce Thompson, Scott Van Slyke, Rob Segedin and even part-time infielders like Hernandez, Darin Ruf or Micah Johnson. L.A. could continue to see what it has with its younger outfielders, or cut through the platoon-mix uncertainty by acquiring a clear-cut everyday corner outfielder. The Dodgers already dealt from this surplus when Howie Kendrick was sent to the Phillies two weeks ago.
Since the Dodgers can and will be spending significant money regardless of their debt reduction actions, they might as well allocate those funds towards players who can more clearly help the 2017 roster. They have the flexibility to mix and match a package of veterans, part-timers and prospects to make a deal happen — say, offering Puig, McCarthy and a good prospect for an everyday second baseman.
5. Keep doing what they’re doing. As noted in Shaikin’s piece, both the Dodgers and Commissioner Rob Manfred are confident that the team will be able to avoid any notable sanctions under the debt service rule, and obviously the Dodgers didn’t just become aware of their debt overnight.
It could be argued that the Dodgers have been addressing their debt issues more or less since Friedman was hired in October 2014. Team officials including Friedman himself, CFO Tucker Kain (as quoted by Shaikin) and team president Stan Kasten have often said in recent years that the team’s long-term plan was to revamp the farm system and international pipeline to such an extent that the Dodgers would no longer require payrolls in the $300MM range.
To that end, I’m guessing that Friedman and company have already explored the first four steps on my list, as the Dodgers work towards their three-pronged goal of winning a World Series in 2017, preparing themselves to contend every year in the future and getting payroll under control. Considering that the Dodgers have continued to win NL West titles in the two years under Friedman’s leadership (including overcoming a ton of injuries in 2016), this slightly reined-in spending hasn’t damaged the product on the field.